2022 has been rough on stocks against the backdrop of rising global inflation, Russia’s invasion of Ukraine, spiking energy prices, mounting political tensions in the U.S., and more. Some of these reasons have been cited by blue chip companies for less-than-rosy guidance, which, understandably, has further exacerbated mounting concerns on Wall Street about revenue and profits in 2H. Any number of overused market axioms are appropriate here – Gretzky’s “skate to where puck is going” or Buffett’s “buy when others are fearful,” for example – but the bottom line is that some good companies have seen their valuations clobbered and already look to be staging a comeback, including Alpha Tau Medical Ltd. (NASDAQ: DRTS), Nvidia (NASDAQ: NVDA), and Dakota Gold Corp. (NYSE American: DC).
Investors in Alpha Tau Medical are staring down a milestone moment in the coming weeks. The company has developed a revolutionary cancer therapy branded DaRT (an acronym for ‘Diffusing Alpha-emitters Radiation Therapy’) that has delivered impressive results in clinical trials treating skin, breast, and oral cancers. Alpha DaRT technology utilizes tiny amounts of radioactive radium-224 attached to metal sources directly inserted into tumors. As the radium-224 decays, it releases atoms that emit short-range alpha radiation, creating double-strand breaks in the tumor cell’s DNA and destroying the tumor without the chance of repair while leaving nearby healthy tissue unscathed.
Alpha DaRT has a number of potential advantages, including a preferable safety profile and MOA independent of tumor cell cycle stage and oxygenation level. Further, Alpha Tau has developed ultra-minimally invasive applicators for different types of tumors throughout the body and no tumor tested yet has been completely resistant to the treatment, meaning Alpha DaRT has potential utility across many solid tumor types.
On June 22, 2022, Alpha Tau said that the first patient was treated in a feasibility study evaluating Alpha DaRT as a neoadjuvant therapy in patients with prostate cancer at the Rambam Health Care Center in Haifa, Israel. It was the first treatment ever of an internal organ using Alpha DaRT. Per protocol, 50 days following Alpha DaRT source insertion, the patient will undergo a surgical resection of the prostate.
That means that the first patient will have surgery on or about August 12, 2022. From the resection, the researchers will be able to analyze the pathological response of tissues to the Alpha DaRT and glean critical information comparing theoretical versus actual cell damage that can pave the way going forward. As prostate cancer is the second most common type of cancer in American men behind only skin cancer, positive study data should have significant implications for Alpha Tau.
DRTS came public via a merger with a special purpose acquisition company, or SPAC, with shares initially slipping to a low of $8.21 at the start of trading in February before rising to a high of $20.65 in March. Shares then fell to $4.68 in May and have rallied since, including currently trading on $11 each as part of a new multi-month uptrend.
Nvidia has been in the headlines for various reasons in recent months, including discussions surrounding Paul Pelosi, husband of Speaker of the House Nancy Pelosi reportedly buying between $1 million and $5 million of the semiconductor company on June 17, shortly before the Senate was scheduled to vote on the CHIPS act. The bipartisan bill, which cleared a Senate cloture vote on July 26 and is hoped to be on President Biden’s desk before the August recess, is designed to support the U.S. semiconductor industry via billions of dollars in tax credits and subsidies.
While NVDA stock could benefit by positive market sentiment related to the CHIPS act, it is notable that Nvidia is not expected to directly benefit from the act’s passage, as Nvidia contracts other companies to manufacture the chips it designs.
CHIPS act aside, Nvidia was sinking from its all-time high set in November 2021 on general bearishness about future demand owing to Chinese COVID lockdowns and falling gaming card prices, a drop that was exacerbated by the Silicon Valley company’s May guidance.
As it went, Nvidia’s data center sales surged to a record $3.75 billion in Q1 2022 from $2.05 billion a year earlier while overall revenue hit a record $8.29 billion from $5.66 billion in the year prior quarter, both beating Wall Street expectations. Net income dipped to $1.62 billion, or 64 cents per share, from $1.91 billion, or 76 cents per share, in the comparative quarter of 2021. The results still topped analyst predictions of $1.30 per share in profits on $8.12 billion in revenue.
Wall Street didn’t reward the strong quarter, rather focused on Q2 revenue guidance in the range of $7.94 billion to $8.26 billion. That was less that the average of $8.4 billion forecast by analysts. Shares of NVDA hit their peak at $346.30 on November 22, 2021. At their recent low of $140.55 on July 5, the stock had lost nearly 60% of its value. On July 19, shares closed over their 50 day moving average for the first time since dropping under in on April 5, an early technical sign that the nearly 8-month-long trend may be trying to reverse.
Dakota Gold is a company that was going relatively unnoticed during its several years listed on the OTCQB marketplace. As evidenced by trading volume, that changed early in April as the South Dakota-based company uplisted to the NYSE American. It also recently was included in the Russell 3000 Index, as well the VanEck Junior Gold Miners ETF.
Dakota’s portfolio includes high-caliber gold mineral properties spanning 42,000+ acres surrounding the historic Homestake Mine. Homestake is an iconic mine that produced over 40 million ounces of gold in a mining-friendly jurisdiction that has produced continuously for nearly a century and a half. Dakota benefits from Homestake Mining’s $70 million exploration investment during the 1980-1990’s before the company was acquired by Barrick Gold in a $2.3 billion stock deal in 2001.
In building its position to ~42,600 acres across 12 different projects, Dakota forged several agreements with Barrick as part of its plan to consolidate and revitalize the region that contains the largest iron formation-hosted gold deposit in the world. The company last month released results from the first drill hole at its Maitland Gold Project located about 3 miles north and contiguous with the Homestake Mine. Highlights included a cut of 16.4 feet grading 0.195 ounces per ton gold from Tertiary breccia, an important discovery considering the district has historically produced 5 million ounces of Tertiary-age gold.
Dakota currently has three rigs turning in the region, which will keep investors looking for more drill results as it executes on a spate of development activities across a half dozen of its projects.
Upon NYSE American listing, shares of DC jumped to a high of $8.47 before an ensuing sell-off. The stock made a low at $2.78 on July 6 before apparently turning a corner. Shares have been rising since, including hitting $4.00 on July 26.
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